(Adds more details from conference and includes share price, in the sixth through eighth paragraphs.)
By Mary Ellen Lloyd
Of DOW JONES NEWSWIRES
Echoing comments by Mattel Corp. (MAT) last month, Hasbro Inc. (HAS) on Thursday said retailers' early, aggressive discounts on holiday toys aren't being funded by fresh price concessions from the toy maker.
"We are not funding any of the additional price cuts," Hasbro Chief Executive Brian Goldner said during the company's investor conference, which was broadcast on the Internet.
Earlier this week, Wal-Mart Stores Inc. (WMT) announced a new wave of "rollbacks" on toy prices, on top of 100 toys for $10 it began offering last month. Target Corp. (TGT), too, is promoting toy savings in a toy book mailed out this week that features $5-off coupons on various Hasbro toys, such as a popular Nerf gun and board games.
Like Mattel, Hasbro said it sets up incentive programs with retailers at the beginning of every year, providing support for agreed-on plans to feature certain toys in advertisements and promotions. Chief Operating Officer David Hargreaves said some retailers opt for smaller profits on toys in order to get shoppers into their stores, while other retailers go with other promotions. "That is their choice," he said.
Mattel executives last month said that, while some retailers are choosing to use promotional dollars from the toy maker to compete on price, its overall level of help for promotions is about the same as last year.
The No. 2 toy retailer behind Mattel, Hasbro on Thursday also outlined what it called "mid-term" financial goals. Without defining "mid-term," executives said the company targets 5% compound annual revenue growth, an operating margin of 15% or better and $500 million a year on average in cash generation.
Saying the broader holiday outlook is too uncertain to provide financial guidance for 2010, Hasbro also reiterated its expectation that a joint venture with Discovery Communications Inc. (DISCA, DISCB, DISCK) to create a new children's television network will generate a 13-cent to 14-cent hit to per-share earnings in 2009 and dilution of 25 cents to 30 cents in 2010 before the network launches that year. Hasbro expects the joint venture to boost earnings beginning in 2011.
Hasbro shares recently traded down 0.2% at $27.70.
-By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145; maryellen.lloyd@dowjones.com